The two previous articles in this series focused on screening ADRs for high yield Latin American dividend stocks. I found the following ADRs to offer substantial current dividend yields:
Ticker | Name | Dividend Yield | Country | Industry |
| PVD | Administradora de Fondos de Pensiones-Provida, S.A. | 6.9% | Chile | Financial |
| YPF | YPF Sociedad Anonima | 6.4% | Argentina | Oil & Gas |
| APSA | Alto Palermo S.A. | 6.3% | Argentina | Real Estate |
| BFR | BBVA Banco Frances | 6.0% | Argentina | Banking |
| CPL | CPFL Energia S.A. | 5.7% | Brazil | Utility |
| SCCO | Southern Peru Copper Corporation | 4.6% | Peru | Mining |
| TMX | Telefonos de Mexico - Series L | 4.3% | Mexico | Telecom |
| IRS | IRSA Inversiones y Representaciones | 3.8% | Argentina | Real Estate |
| BLX | Banco Latinoamericano de Comercio Exterior, S.A. | 3.8% | Panama | Banking |
| OMAB | Grupo Aeroportuario del Centro Norte | 3.7% | Mexico | Transport |
| SID | National Steel Corporation | 3.6% | Brazil | Steel |
| BCH | Banco De Chile | 3.4% | Chile | Banking |
| PAC | Grupo Aeroportuario del Pacifico | 3.3% | Mexico | Transport |
| ASR | Grupo Aeroportuario del Sureste | 3.2% | Mexico | Transport |
The first article reviewed SCCO, BLX, CPL and BFR. The second article reviewed OMAB, TMX, PVD, and BCH. This article will focus on YPF, IRS, PAC, and ASR. YPF is probably the most interesting opportunity given its high yield and position in the Oil & Gas industry.
YPF Sociedad Anonima (YPF) currently has a market capitalization of around $17.9 billion and is engaged in oil and gas refining and marketing. It operates approximately 70 oil and gas fields in Argentina. YPF's business is divided into six segments.
| Date | Dividends | Trailing 12 Months | Implied Yield | |
| 11/10/2010 | 1.465 | 2.884 | 41.24 | 7.0% |
| 4/21/2010 | 1.419 | 3.030 | 44.52 | 6.8% |
| 11/9/2009 | 1.611 | 3.307 | 37.00 | 8.9% |
| 5/11/2009 | 1.696 | 3.616 | 29.57 | 12.2% |
| 11/13/2008 | 1.920 | 7.389 | 46.74 | 15.8% |
| 5/7/2008 | 2.055 | 5.469 | 45.10 | 12.1% |
| 2/26/2008 | 3.414 | 3.414 | 39.79 | 8.6% |
| 3/16/2007 | 1.933 | 1.933 | 41.41 | 4.7% |
| 5/10/2006 | 1.973 | 3.459 | 49.07 | 7.0% |
| 11/18/2005 | 1.486 | 4.254 | 63.71 | 6.7% |
| 4/28/2005 | 2.768 | 4.288 | 51.75 | 8.3% |
| 11/5/2004 | 1.520 | 4.660 | 40.25 | 11.6% |
| 4/29/2004 | 3.140 | 4.082 | 38.96 | 10.5% |
| 7/11/2003 | 0.942 | 2.648 | 26.30 | 10.1% |
| 4/22/2003 | 1.706 | 2.839 | 18.25 | 15.6% |
| 11/20/2002 | 1.133 | 1.133 | 10.85 | 10.4% |
Source: Yahoo!Finance
While dividends have been declining in recent years, rising oil prices should improve YPF's outlook. It is expected to declare another dividend shortly.
IRSA Inversiones y Representaciones (IRS) has a market capitalization that is just under $800 million. It is focused on real estate development in Argentina. IRS owns and operates shopping centers, residential apartment complexes and luxury hotels. IRS owns and operates 11 shopping centers. Many of its assets are located in the greater metro Buenos Aires area.
| Date | Dividends | Trailing 12 Months | Closing Price | Implied Yield |
| 11/16/2010 | 0.524 | 0.524 | 15.72 | 3.3% |
| 11/12/2009 | 0.144 | 0.144 | 7.85 | 1.8% |
Source: Yahoo!Finance
The short and irregular dividend history makes IRS a less interesting company. It should be noted that prior to 2000, IRS also made dividend payments. These yields were highly variable ranging from 1% to 5%. IRS would offer one way to gain real estate exposure to Argentina.
Grupo Aeroportuario del Pacifico (PAC) has a market capitalization of
$1.7 billion and operates 12 airports in central Mexico. Recent key news includes about a 5% year on year decline in traffic for the month of March.
| Date | Dividends | Trailing 12 Months | Closing Price | Implied Yield |
| 11/24/2010 | 0.350 | 1.399 | 36.92 | 3.8% |
| 6/10/2010 | 1.049 | 1.480 | 33.82 | 4.4% |
| 10/28/2009 | 0.431 | 1.500 | 25.32 | 5.9% |
| 5/20/2009 | 1.069 | 1.447 | 21.21 | 6.8% |
| 10/28/2008 | 0.378 | 1.848 | 16.46 | 11.2% |
| 5/7/2008 | 1.470 | 2.007 | 40.76 | 4.9% |
| 10/26/2007 | 0.537 | 1.871 | 55.08 | 3.4% |
| 5/14/2007 | 1.334 | 2.491 | 49.63 | 5.0% |
Source: Yahoo!Finance
PAC has not recovered to its pre financial crisis price levels and is showing declining dividend payments which could cause additional concern. Investing in this stock would require additional fundamental research.
Grupo Aeroportuario del Sureste (ASR) is a $1.7 billion market cap company that operates 9 airports in southeastern Mexico including vacation hot spots, Cancun and Cozumel. The company was founded in 1998 and currently has about 900 employees. It is about to declare another dividend and has had regular dividend payments with ex-dividend dates in late May or early June. Dividends are paid annually. ASR Recent Historical Dividends
Source: Yahoo!FinanceDate Annual Dividend Closing Price Implied Yield 5/14/2010 2.024 51.37 3.9% 5/8/2009 4.708 31.47 15.0% 5/22/2008 1.909 50.48 3.8% 5/30/2007 0.695 50.79 1.4% 5/25/2006 0.616 35.60 1.7% 5/25/2005 0.562 29.00 1.9% 6/7/2004 0.491 18.46 2.7% 5/22/2003 0.487 12.94 3.8% 5/24/2002 1.556 16.15 9.6%
It is clear that ASR has paid highly irregular dividends. Recent strong performance might not continue; however, the stock price has recovered to its peak levels in 2007 and 2008. Current dividend yield is also not reflective of the yields from 2004-2007 which were substantially lower.
Conclusion
Within these four ADRs, YPF probably offers the best prospects given its high dividend yield with a track record of high yields and exposure to oil and gas. Both airport operating companies offer pretty variable performance. OMAB, reviewed in Part 2, is probably a better option than either PAC or ASR. Between PAC and ASR, I would probably choose PAC due to more consistent dividends. IRS extremely short history and relatively smaller size disqualify it as a great dividend play.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: This article is for informational and educational purposes only and shall not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security.
